14th November (Issue 122)
Welcome to the Origin Capital Weekly Irish Property Review. This update is designed to provide you with a full recap of the latest property news from the media over the last seven days.
RETAIL
Blanchardstown Shopping Centre (BSC): Plans for a c. €40m extension and refurbishment to the Red Mall of BSC have been approved by the local authority. The proposal will see c. 100,000 sq. ft. of retail space added to the shopping centre, through the construction of one 40,000 sq. ft. unit and 18 standard units. In total, the shopping complex currently has c. 12m sq. ft. of retail space across 180 outlets. The Irish Independent, 9th November
Kinsealy / Swords Neighbourhood Centres: Knight Frank is guiding in excess of €6.75m for two income-producing neighbourhood centres located in the north Dublin suburbs of Swords and Kinsealy. Applewood Village in Swords and Drynam Square in Kinsealy produce a gross rental income of €720k p.a., equating to a yield of 9.1%. The Applewood development contributes c. €583k of the rental income, with Drynam accounting for the remaining €137k. The complex is currently 74% let, and the selling agents expect the rental income to rise to c. €900k when the complex is fully let. The two centres combine for c. 64,700 sq. ft. of space, made up of commercial and residential space, with seven apartments and two houses in the portfolio. The Irish Times, 8th November
Topaz Filling Stations: Cushman & Wakefield are seeking c. €4.965m for two petrol stations leased by Topaz near Ashbourne, Co. Meath and Kilshane Cross, near Finglas in Dublin. The petrol stations can either be bought separately or in a single lot. The Coolfore Service Station near Ashbourne is expected to sell for more than €3.365m, offering a yield of 8.52% based on income of €311k p.a. Topaz pays €282k of the rent, with the remaining €28k coming from a car showroom and gym to the rear of the property. The second service station, Kilshane Cross, has a guide price in excess of €1.6m and is currently generating rental income of €174k p.a. The Irish Times, 7th November
6 / 7 Castle Market and 42 Drury Street: Agar Commercial Property Consultants are inviting bids of over €2.8m for three adjoining retail units at 6 / 7 Castle Market and 42 Drury Street in Dublin 2, with the properties offering a return of between 4.5% and 5.1% based on the current rental income of c. €158k p.a. The retail units are occupied by Charlie Cullen and Suzanne Gilhooly t/a Cullen & Co Jewellers (€65k plus VAT for 1,658 sq. ft.), Nail & Beauty Salon (€50k for 742 sq. ft.) and Blazing Salads (€42.5k for 968 sq. ft.). The properties are to be sold by tender on December 6th, in one or more lots. Agar are guiding €2.1m for the jewellery shop and salon, and €780k-plus for Blazing Salads. The Irish Times, 8th November
Kildare Village: Sales in Kildare Village rose by 21% in 2016, following the opening of a €50m Phase 2 extension in late 2015. Footfall in the centre, which houses 95 boutiques, increased by 27% with international visitor numbers and tax-free sales recording strong growth. There was a 14% increase in tax-free sales, while the average transaction value for tax-free sales rose by 8%. The outlet recently submitted plans for a third development phase which would add another 29 units to the scheme. A Prada store is due to open in the centre in the coming days, while other new openings include Rituals, Kurt Geiger Men’s and The Christmas Collective. The Irish Independent, 12th November
OFFICE
Treasury Building: The Irish Independent reports that Google is close to finalising a deal to purchase the Treasury Building, located on Grand Canal Street in Dublin 2, for over €120m. Google previously acquired its European HQ on Barrow Street and the nearby Montevetro building for €100m and €99m in 2011. Google may move into the Treasury Building as early as next year. The NTMA currently occupies the property, however they will shortly move to their new HQ in the Dublin Landings development in the north docklands. The Irish Independent, 12th November
51 Lower Leeson Street: Knight Frank are guiding €2m for 51 Lower Leeson Street in Dublin 2, a Georgian building divided into office and residential accommodation. The office space is let to Capnua Corporate Finance under a short-term lease expiring in December 2018 at a rent of €65k p.a. Above the office element is a city townhouse which will be available with vacant possession. The property extends to 3,930 sq. ft. and also comes with two basement car parking spaces. The Irish Times, 7th November
HOTEL
Crowe Horwath (CH) / Cushman & Wakefield (C&W) Report: A new report by CH / C&W on the Dublin hotel market estimates that demand levels for Dublin hotel rooms will need to increase by c. 15% over the next five years if current profitability and occupancy levels are to be maintained, as new supply comes onto the market. According to the report, c. 4,000 new hotel rooms will be made available over the next five years. To maintain current profitability and occupancy levels, an additional c. 845,000 rooms would need to be sold each year over the next five years. Dublin occupancy rates were 82% in 2016. The Irish Independent, 11th November
Rathmines Aparthotel: Justin Keatinge, formerly of IT services company Version 1, is set to build an aparthotel in Dublin 6. Mr Keatinge will convert the former presbytery of the Mary Immaculate Refuge of Sinners church into ‘serviced short-term tourist accommodation’. The Sunday Times, 12th November
Blessington Street Aparthotel: DEC Building Services DAC has sought planning permission from Dublin City Council to demolish industrial buildings on Blessington Street off Dorset Street in Dublin city centre and replace them with a 28-unit, 6,500 sq. ft. aparthotel. NAMA Wine Lake, 12th October
RESIDENTIAL / LAND
Hampton Wood Square: Joint agents CBRE and Dillon Marshal Property Consultants are inviting offers of €32m for a newly completed development of 128 apartments at Hampton Wood Square in Finglas, north Dublin. The apartments, which were completed by Dwyer Nolan, are spread over two four-to-six storey blocks, and consist of 46 one-bedroom apartments and 82 two-bedroom apartments. The projected rental income of the development, upon achieving 100% occupancy, is c. €2.435m p.a. The Irish Times, 8th November
Mars Capital Securitisation: Mars Capital is planning to refinance €542m of Irish mortgages on the bond market through its second securitisation. The company is working with Morgan Stanley to complete the securitisation under the entity Grand Canal Securities 2. The company bought an Irish Nationwide Building Society loan book from IBRC in 2015, and also purchased a book of mortgages that originated with Springboard from PTSB in 2014. The pending securitisation has been rated by Moody’s and DBRS and contains both performing and non-performing loans throughout Ireland, with about 20% located in Dublin. Mars Capital previously refinanced €332m of former Irish Nationwide and PTSB loans in April 2017. The Sunday Times, 12th November
Arena Centre: SeaPoint Capital is set to acquire a portfolio of 63 apartments at the mixed-use Arena Centre in Tallaght, Co. Dublin, from Green REIT for €9.25m. The Arena Centre was completed in 2008 and contains a mixture of retail and office space, 230 apartments and a 119-bedroom hotel. The apartments consist of a mixture of one-, two- and three-bedroom units and are located close to public transport services, with Woodies, Lidl and Bank of Ireland also nearby. The Irish Times, 8th November
CSO Property Prices: The latest figures from the CSO show that national residential property prices rose by the 12.8% in the year ending September 2017, with growth of 2% recorded in the month of September alone. Property prices in Dublin rose by 12.2%, split between house price increases of 12.4% and apartment price increases of 11.4%. Excluding Dublin, national property prices rose by 13.2% for the year ending September 2017. National property prices have now risen by 70.2%, with Dublin prices rising by 87%. CSO, Residential Property Price Index September 2017
Economic and Social Research Institute (ESRI) Report: A new report by the State-funded ESRI estimates that house prices in Ireland will rise by at least 20% between now and 2020. Despite their forecast for strong growth, the institute does not believe that the Irish residential property market is in danger of overheating, based on their comparison of price-to-income ratios and price-to-rent ratios in Ireland and internationally. The ESRI believe that unless there is a significant unexpected shock, or a substantial increase in supply, prices will continue to trend upward. The Irish Times, 14th November
Daft.ie Rent Report: The latest report by Daft.ie on residential rents shows that national rent inflation was by 3.4% in Q3 2017, the fourth largest quarterly increase on record. Annual inflation is now 11.2%. In Dublin, rents rose by 3.9% in Q3 2017, with annual inflation in the capital now at 12.3%. National rents are now 16.4% above their 2008 levels, with rents in Dublin and Galway at levels which are 22.8% and 25% above their previous peak levels. The report shows that there are currently less than 3,400 properties available to rent nationally, an increase on the c. 2,900 which were available on August 1st, but a decline of c. 16% from the same date in 2016. The Daft.ie Rental Price Report – 2017 Q3
KBC Bank Homebuyer Sentiment Survey (HSS): The latest KBC Bank HSS estimates that there are c. 110,000 people ready and willing to purchase a home, with people looking to move home accounting for c. 40,000 of this figure. The 110,000 figure represents double the amount of properties which are expected to be sold in the next year, highlighting the shortage of available properties in the Irish market. The KBC Bank HSS excludes investors looking to acquire a residential property. The Irish Independent, 11th November
Bank of Ireland (BoI) Tracker Mortgages: BoI has announced that it has discovered another c. 6,000 mortgage holders who were overcharged interest due to them previously being told that they were not entitled to a tracker mortgage. The 6,000 figure includes 2,000 bank staff, and brings the total number of affected BoI accounts to over 10,000, the largest number among the 15 lenders being examined as part of the tracker remediation scheme. BoI has set aside between €150m and €175m to cover the cost of the redress for the 6,000 mortgage holders. The Irish Independent, 10th November
Charleston House Cork: The Irish Examiner reports that Donal Relihan of DNR Homes is in the process of acquiring a 12-acre residential site in Midleton, Co. Cork for over €4m, after the site had been guiding €3.65m. The site includes Charleston House, a 5,500 sq. ft. Edwardian property situated on two acres and ten acres of zoned residential land. It is expected that Mr Relihan will look to develop c. 100 homes on the ten acre site. The Irish Examiner, 9th November
Charlestown Shopping Centre Development: Bovale Developments has been granted planning permission for a revised second phase of development at the Charlestown Shopping Centre in north Dublin. The new scheme will include 222 apartments across five blocks up to seven storeys in height, alongside 69,000 sq. ft. of retail space, a crèche and an outdoor playground. As part of the planning approval, the company must pay €2.2m to Fingal County Council towards local infrastructure, and must also lodge a bond of €888k (or €555k cash) with the council before work begins. The Sunday Times, 12th November
Donabate Housing Development: The McGarrell Reilly Group has received planning permission for a 258-unit residential development at Hearse Road in Donabate, north Dublin. The €30m project will see the development of 196 houses and 62 apartments. The Sunday Business Post, 12th November
Cabinteely Development: Michael O’Flynn has been granted planning permission from the High Court for a €75m residential development at Beech Park in Cabinteely, Co. Dublin. The scheme will contain 160 units but is subject to another appeal process before construction can commence. The Sunday Business Post, 12th November
INDUSTRIAL
Unit 1 Stadium Business Park: New Frontier, a British REIT, has entered the Irish market by purchasing a north Dublin warehouse in a deal that was completed at the end of October. The company paid €8.6m for Unit 1 at Stadium Business Park in Ballycoolin. The property is let to Viking Direct at a rent of €744k p.a. on a lease that runs until 2027. The Sunday Times, 12th November
Willsborough Enterprise Centre: CBRE is guiding €4.5m for Willsborough Enterprise Centre, a fully-let scheme of industrial units at Clonshaugh Business and Technology Park in Dublin 11. The centre contains nine industrial units in two blocks, and is producing rental income of €364k p.a. with a weighted average unexpired lease term of c. 5.4 years. The centre extends to 37,630 sq. ft., with units ranging in size from 3,457 sq. ft. to 6,135 sq. ft. Tenants in the park, which is located in close proximity to the M50, M1 and Dublin Airport, include Vernon Catering, Velux and IT Group. The guide price represents a capital value of €120 psf which is well below the build cost of new space of €180 psf. The Irish Times, 7th November
Santry Warehouse / Distribution Facilities: JLL is guiding €2.25m for two adjoining warehouse and distribution facilities in Santry, Dublin 9. Units C1 and C2 in Furry Park Industrial Estate in Dublin 9 are let to tenants Total Material Handling and Dunwoody Airline Services at a rent of €203k p.a., and the weighted average unexpired lease term is more than six years. The units were developed in the 1990s and together extend to 19,893 sq. ft. The guide price reflects a yield of 8.3% after standard purchaser costs. The Irish Times, 7th November
OTHER
Rialto Cinema: The Rialto Cinema in Dublin 8 has been sold to an unnamed European family for €2.7m, €200k above the guide price. The planned use for the property is unknown, but according to selling agents BNP Paribas Real Estate, potential uses could include retail, residential, offices, a hotel or medical use. The Irish Times, 7th November
Killenard Retirement Village: The proposed development of a c. €60m retirement village in Co. Laois has received planning approval, subject to the satisfaction of 19 conditions. The retirement village will contain a 116-bed nursing home, which will include a 20-bed dementia care unit. Killenard Retirement Village will be situated close to the M7 motorway, c. 45 minutes from Dublin and c. 10 minutes from Portarlington, the nearest town. The facility will be developed by Keane Developments, and Passage Healthcare Investments is expected to operate the completed facility under a 30-year lease. The anticipated revenue from the facility will be c. €1m p.a., primarily from the Government’s Fair Deal scheme. The Sunday Business Post, 12th November
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